New Delhi: The agriculture gross non‑performing assets at scheduled commercial banks could be near 5.3 per cent to 5.6 per cent by March 2028 after a weak 2026 monsoon with public sector banks (PSBs) likely to bear most of the stress, a report said on Thursday.
The report from CareEdge Ratings said the agriculture GNPA ratio stood at 5.11 per cent in June 2026 and that agriculture accounted for 12.9 per cent of SCB advances but 37.5 per cent of all SCB GNPAs.
“We expect the agriculture GNPA ratio to keep easing until early 2027, helped by strong credit growth and write-offs, and then to rise through FY28 as some kharif crop loans affected by the weak monsoon fall overdue,” said Saurabh Bhalerao, Director, CareEdge Ratings.
The report forecasted the agriculture GNPA ratio to ease to 4.6 per cent to 4.8 per cent by March 2027. It is then likely to rise to above mentioned levels, as some kharif crop loans in areas hit by the weak monsoon turn bad and are classified as non-performing assets (NPAs).
Agriculture GNPA, at Rs 1.41 lakh crore in June 2026, could rise to Rs 1.47 lakh crore to Rs 1.53 lakh crore by March 2027 and Rs 1.9 lakh crore to Rs 2 lakh crore by March 2028, with most monsoon-related stress likely to show in bank books in FY28.
The weak monsoon could add 70 to 80 bps to the agriculture GNPA ratio by March 2028. Including farm loans restructured in drought-hit areas, which stay classified as standard assets, stressed agriculture advances could reach 6 per cent to 6.3 per cent of agriculture advances.
The 2026 southwest monsoon ended at 87 per cent of the long-period average, the weakest since 2015. The shortfall was concentrated in states that hold most of the banks’ farm credit: about 68 per cent of SCB agriculture credit is in states where rainfall was 20 per cent or more below normal, up from 48 per cent in 2015, the report added.
(IANS)
